Mollisia is a taxonomically neglected discomycete genus (Helotiales, Leotiomycetes) of commonly encountered saprotrophs on decaying plant tissues throughout temperate regions. The combination of indistinct morphological characters, more than 700 names in the literature, and lack of reference DNA sequences presents a major challenge when working with Mollisia. Unidentified endophytes, including strains that produced antifungal or antiinsectan secondary metabolites, were isolated from conifer needles in New Brunswick and placed with uncertainty in Phialocephala and Mollisia, necessitating a more comprehensive treatment of these genera. In this study, morphology and multigene phylogenetic analyses were used to explore the taxonomy of Mollisiaceae, including Mollisia, Phialocephala, and related genera, using new field collections, herbarium specimens, and accessioned cultures and sequences. The phylogeny of Mollisiaceae was reconstructed and compared using the nuc internal transcribed spacer rDNA (ITS) barcode and partial sequences of the 28S nuc rDNA (LSU) gene, largest subunit of RNA polymerase II (RPB1), DNA topoisomerase I (TOP1), and the hypothetical protein Lipin/Ned1/Smp2 (LNS2). The results show that endophytism is common throughout the Mollisiaceae lineage in a diverse range of hosts but is infrequently attributed to Mollisia because of a paucity of reference sequences. Generic boundaries within Mollisiaceae are poorly resolved and based on phylogenetic evidence the family included species placed in Acephala, Acidomelania, Barrenia, Bispora, Cheirospora, Cystodendron, Fuscosclera, Hysteronaevia, Loramyces, Mollisia, Neopyrenopeziza, Obtectodiscus, Ombrophila, Patellariopsis, Phialocephala, Pulvinata, Tapesia (=Mollisia), and Trimmatostroma. Taxonomic novelties included the description of five novel Mollisia species and five novel Phialocephala species and the synonymy of Fuscosclera with Phialocephala, Acidomelania with Mollisia, and Loramycetaceae with Mollisiaceae. Key words: discomycete, molecular taxonomy, new taxa, Mollisia, Phialocephala, species identification.